Tolerance activity for the first time in weeks
A weekly association of mortgage bankers (MBA) report which tracks the share of mortgages in active abstention as well as the volumes of calls from managers (because borrowers must call his agent in order to benefit from the extension) showed that the total loans in forbearance increased by 1 basis point compared to the previous week: from 5.22% to 5.23%.
“A slight increase in new forbearance requests, coupled with a decrease in outflows to match a weak poll, led to an increase in the overall share of forbearance loans for the first time in five weeks,” said Mike Fratantoni , Executive Vice President of MBA and Chief Economist. “The biggest increase in the forbearance share was for portfolio loans and PLS, due to the increase in Ginnie Mae buyouts and other portfolio / PLS loans.”
Fratantoni added, “The winter storm that hit Texas and other states caused temporary disruptions to service call centers, but these centers quickly resumed operations.”
Broken down by investor type—
- The share of Ginnie Mae loans in forbearance increased from the previous week: from 7.32% to 7.35%.
- The share of Fannie Mae and Freddie Mac loans in forbearance remained the same from the previous week at 2.97%.
- The share of other loans (eg portfolio loans and PLS loans) in forbearance increased compared to the previous week: from 8.94% to 9.03%.
By step –
- 15.6% of total forborne loans are in the initial stage of the forbearance plan
- 81.9% are in an abstention extension
- The remaining 2.5% is income from abstention.
Of the cumulative forbearance outflows for the period June 1, 2020 to February 21, 28%, 27.8% were borrowers who continued to make their monthly payments during their forbearance period, 25.9% were successful loan deferral / partial claim, 15.3% resulted in reinstatements, during which overdue amounts are repaid upon exit from forbearance, 13.8% were borrowers who failed to complete all their monthly payments and left forbearance without a loss mitigation plan still in place, 7.8% resulted in a trial loan modification, 7.6% resulted in repaid loans by refinancing or selling the house, and the remaining 1.8% resulted in repayment plans, short sales, deeds of replacement or other reasons.